Good Morning on this Terrific Thursday,
Big data day…
- CPI MOM -0.1 vs -0.1
- Core CPI 0.3 vs 0.3
- Initial Claims 205K vs 215K
Core CPI came in as the market expected, but the headline number which includes food and energy came in extremely low. The low headline number is good for us at the grocery store cash register, but will not do much to keep The Fed’s foot off the gas. The Fed cares about the Core level of inflation and while that came in as expected, the services sector showed no relief on inflation and this the Fed has a close eye on. The net effect of these numbers should produce a bit of chop but could be deemed as net positive. Just be careful around the 3.50% (currently at 3.49%) ten-year and mortgage bonds at current levels. Both are at strong levels of resistance, and we could see an unfavorable bounce if we fail to break those levels.
Please remain safe and stay healthy, make today great!